IRA distribution

I got a the minimum distribution from an inherited IRA of $1,200. Eventhough we are in the 22% bracket, this is being taxed at 27%. Not sure why that is. Before adding this distribution we were due to receive $220 return, after inputting this distribution we owe $104 in taxes.

This $1,200 does not put us in a higher bracket.

Why is this being taxed at a higher rate?

Thank you,

207

Expert Alumni

Feb 4, 2020 6:34:48 PM

The increase of $324 in your tax liability is not necessarily the direct consequence only of your inputting of the $1,200 income. The increase in your taxable income may have consequences also in certain income-based credits such as the Earned income credit.

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IRA distribution